Ola Electric Mobility’s shares rose 20% on debut, valuing it at $4.8 billion, as investors anticipate growth in electric vehicles.
The stock listed flat at 76 rupees but rose to 91.20 rupees, as the broader market gained 1%.
Ola Electric’s $734 million IPO leads 2024 in India, highlighting its role in the growing EV market amid government clean energy efforts.
Analysts noted that improving market sentiment helped the Nifty 50 rebound 1.3% in four sessions after a 2.7% drop.
“Despite receiving demand well below street expectation, Ola listed well above street expectations, which can be attributed to market mood,” said Prashanth Tapse, senior vice president of research at Mehta Equities.
As of July, Ola Electric leads India’s electric scooter market with a 39% share, despite launching just three years ago.
Ola Electric: Investor Optimism, Motorcycle Launch, and Path to Profitability
Analysts noted that investors are optimistic about Ola Electric’s entry into motorcycles, which dominate India’s two-wheeler market.
The company will unveil its electric motorcycle range next week, marking an exciting development.
“The flat opening seems to have encouraged investors who weren’t allotted shares in the IPO to hop on, and they seem to be optimistic of Ola’s motorcycle launch,” said Varun Baxi, lead analyst at Nirmal Bang Institutional Equities.
Although Ola’s revenues surged 90%, it still hasn’t turned a profit, with losses widening by 8% year-on-year.
“Our focus will be to build profitable growth for investors to also feel that there is a long term profitability journey here also,” Ola Electric’s founder Bhavish Aggarwal told CNBC-TV18 on Friday after ringing the bell at the NSE stock exchange.
The company will invest most of its $660 million IPO proceeds into R&D and battery cell manufacturing.
Ola Electric aims to boost scooter affordability by manufacturing its own battery cells, targeting commercial production by early 2025.
“Ola Electric is in a very aggressive growth phase … where we are investing for future growth,” Aggarwal said.
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